Business area Project Development
Business area Project Development, which comprises Housing Development and Property Development, develops sustainable and vibrant urban environments with residential, commercial and public property.
The business area is responsible for the Group’s property acquisitions and divestitures as well as project development which generates contract work for the other business areas. Project Development works through wholly owned companies or in collaboration with other partners in joint ventures.
Housing Development offers a broad range of housing forms including apartment buildings with tenant-owner apartments, condominiums and apartments for rent.
Property Development develops office buildings, premises and sometimes entire city districts in collaboration with municipalities and other partners. Operations are primarily concentrated to the big city areas throughout the Nordic region.
Net sales and profit
October – December 2024
Net sales in Project Development increased by 19 percent in the fourth quarter and amounted to SEK 1,737 million (1,456). Operating profit amounted to SEK 521 million (17) and the operating margin was 30.0 percent (1.2).
January – December 2024
Net sales in Project Development contracted during 2024 and amounted to SEK 4,270 million (5,722). The decrease is attributable to Housing Development. Operating profit amounted to SEK 728 million (304) and the operating margin was 17.0 percent (5.3).
Capital employed in Project Development at the end of the year amounted to SEK 19,767 million (18,093).
Capital employed
| MSEK | Dec 31 2024 | Dec 31 2023 | |
| Mkr | 31 dec 2024 | 31 dec 2023 | |
| Operations property | Driftsfastigheter | 34 | 146 |
| Investment property | Förvaltningsfastigheter | 36 | 36 |
| Project and development property | Projekt- och exploateringsfastigheter | 17,017 | 14,603 |
| of which housing development rights | varav bostadsbyggrätter | 9,344 | 7,981 |
| of which commercial development rights | varav kommersiella byggrätter | 1,671 | 901 |
| of which unsold part of ongoing housing projects | varav osåld del av pågående bostadsprojekt | 1,979 | 2,461 |
| of which ongoing rental projects | varav pågående hyresrättsprojekt | 761 | 1,712 |
| of which ongoing commercial projects | varav pågående kommersiella projekt | 115 | 489 |
| of which completed property | varav färdigställda fastigheter | 2,212 | 165 |
| of which other | varav övrigt | 935 | 894 |
| Participation in joint ventures | Andelar i joint ventures | 2,880 | 2,820 |
| Loans to joint ventures | Utlåning till joint ventures | 484 | 1,498 |
| Working capital and other | Rörelsekapital och övrigt | -684 | -1,010 |
| Total | Summa | 19,767 | 18,093 |
| of which Property Development | varav Fastighetsutveckling | 6,165 | 5,034 |
| of which Housing Development | varav Bostadsutveckling | 13,602 | 13,059 |
Key ratios
| Oct-Dec 2024 | Oct-Dec 2023 | Jan-Dec 2024 | Jan-Dec 2023 | ||
| Okt-dec 2024 | Okt-dec 2023 | Jan-dec 2024 | Jan-dec 2023 | ||
| Net sales, MSEK | Nettoomsättning, Mkr | 1,737 | 1,456 | 4,270 | 5,722 |
| of which Property Development | varav Fastighetsutveckling | 636 | 453 | 686 | 534 |
| of which Housing Development | varav Bostadsutveckling | 1,101 | 1,003 | 3,584 | 5,188 |
| Operating profit, MSEK | Rörelseresultat, Mkr | 521 | 17 | 728 | 304 |
| of which Property Development | varav Fastighetsutveckling | 533 | 63 | 823 | 107 |
| of which Housing Development | varav Bostadsutveckling | -12 | -46 | -95 | 197 |
| Operating margin, % | Rörelsemarginal, % | 30.0 | 1.2 | 17.0 | 5.3 |
| of which Property Development | varav Fastighetsutveckling | 83.8 | 13.9 | 120.0 | 20.0 |
| of which Housing Development | varav Bostadsutveckling | -1.1 | -4.6 | -2.7 | 3.8 |
| Capital employed at the end of the period, MSEK | Sysselsatt kapital vid periodens utgång, Mkr | 19,767 | 18,093 | 19,767 | 18,093 |
| Orders received, MSEK | Orderingång, Mkr | 1,246 | -151 | 2,213 | 136 |
| Order backlog, MSEK | Orderstock, Mkr | 1,536 | 1,620 | 1,536 | 1,620 |
| Operating cash flow, MSEK | Operativt kassaflöde, Mkr | 204 | -213 | 422 | -2,254 |
| Average number of employees | Medeltal antal anställda | 139 | 199 | 155 | 222 |
Housing Development
October – December 2024
Net sales for the quarter amounted to SEK 1,101 million (1,003). Operating profit amounted to SEK -12 million (-46) and the operating margin was -1.1 percent (-4.6). The negative operating profit is due to few housing projects in ongoing production.
Demand for newly produced homes with a long time before occupancy remains low. During the fourth quarter production started on a total of 370 (79) our own developed homes, all of which were tenant-owner apartments/condominiums, of which 167 were converted from rental apartments. Last year 79 homes were production-started in rental apartment projects. The total number of sold homes was 267 (330), all of which were tenant-owner apartments/condominiums (201). Last year 129 homes were sold in rental apartment projects as well.
January – December 2024
Continued weak demand on the housing market throughout the Nordic region is clearly noticeable in Housing Development. Net sales decreased to SEK 3,584 million (5,188). Operating profit amounted to SEK -95 million (197) and the operating margin was -2.7 percent (3.8).
A total of 615 (727) own developed homes were started during the year, all of them tenant-owner apartments/condominiums, of which 167 were converted from rental apartments. Last year production started on 121 tenant-owner apartments/condominiums, of which 85 were converted from rental apartments and 606 were homes in rental apartment projects on our own balance sheet. The number of sold homes was 1,008 (934), of which 710 (542) were tenant-owner apartments/condominiums and 298 (392) were homes in rental apartment projects.
The total number of homes in production at the end of the year was 1,550 (3,694), of which 1,056 (2,392) were tenant-owner apartments/condominiums and 494 (1,302) were homes in rental apartment projects. The portion of sold tenant-owner apartments/condominiums in ongoing production was 45 percent (68). The number of repurchased homes per December 31, 2024 was 224 (252) and approximately half of them were in Finland.
Production starts and sales of our own housing developments continued to be at low levels during the year, although we are selling at a steady pace. During the fourth quarter, we started new projects and converted rental apartment projects from our own balance sheet to tenant-owner apartments/condominiums. This illustrates the continuing trend that sales opportunities increase as the project approaches completion. For this reason we are further developing the strategy of starting projects on our own balance sheet to then convert them into tenant-owner apartments. This entails more tied-up capital and deferred effects on profits compared with our traditional method of advance sales before production starts of our own developments.
There is an underlying need for new housing although aspects like high construction costs and downward revised forecasts regarding population growth make it harder to assess demand in the medium-term. As far as Peab is concerned we have a well-dimensioned development rights portfolio in attractive locations and in anticipation of market recovery we are further developing and preparing projects for start-ups in the future.
Capital employed increased and amounted to SEK 13,602 million (13,059) at the end of the year. The increase is primarily due to investments in development rights in, among other places, Kvarnholmen in Nacka and Varvsstaden in Malmö.
In December 2023 Peab signed a contract to acquire Folksam’s shares in Sicklaön Bygg Invest AB that partly and wholly owns development rights in Kvarnholmen in Nacka. The acquisition was concluded in January 2024 and Peab thereby increased its ownership from 50 to 100 percent. Peab has developed homes on Kvarnholmen since 2013. Sicklaön Bygg Invest AB has more than 270 zoning approved, wholly owned development rights for a gross area of 26,000 m2. In addition, the company owns 50 percent of the shares in Kvarnholmen Utveckling AB that has an ongoing zoning process for more than 120,000 m2 housing development rights. Half of them will be turned over to Peab.
During the fourth quarter Peab acquired, among other things, development properties with about 280,000 m2 of planned development rights in Malmö from the joint venture company Fastighets AB Centur, which increased the number of housing development rights in Housing Development by about 1,700. For more information, see the section Property Development below.
Net sales
per geographic market, 2024
Development rights for housing
| Number, approx. | Dec 31 2024 | Dec 31 2023 | |
| Antal, cirka | 31 dec 2024 | 31 dec 2023 | |
| Development rights on our own balance sheet | Byggrätter i egen balansräkning | 24,000 | 22,000 |
| Development rights via joint ventures | Byggrätter via joint ventures | 3,700 | 4,700 |
| Development rights via options etc. | Byggrätter via optioner m.m. | 7,400 | 7,400 |
| Total | Totalt | 35,100 | 34,100 |
Own housing development construction
| Oct-Dec 2024 | Oct-Dec 2023 | Jan-Dec 2024 | Jan-Dec 2023 | ||
| Okt-dec 2024 | Okt-dec 2023 | Jan-dec 2024 | Jan-dec 2023 | ||
| Tenant-owner associations, ownership and residential limited companies | Bostadsrätter, ägarlägenheter och bostadsaktiebolag | ||||
| Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | 3701) | – | 615 2) | 121 2) |
| Number of sold homes during the period | Antal under perioden sålda bostäder | 267 | 201 | 710 | 542 |
| Total number of homes under production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 1,056 | 2,392 | 1,056 | 2,392 |
| Portion of sold homes under production, at the end of the period | Andel sålda bostäder i produktion, vid periodens slut | 45% | 68% | 45% | 68% |
| Number of repurchased homes on our balance sheet, at the end of the period | Antal återköpta bostäder i egen balansräkning, vid periodens slut | 224 | 252 | 224 | 252 |
| Rentals | Hyresrätter | ||||
| Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | – | 79 | – | 606 |
| Number of sold homes during the period | Antal under perioden sålda bostäder | – | 129 | 298 | 392 |
| Number converted to tenant-owner associations during the period | Antal under perioden konverterade till bostadsrätter | 167 | – | 167 | 85 |
| Total number of homes under production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 494 | 1,302 | 494 3) | 1,302 3) |
| Number of homes completed, at the end of the period | Antal färdigställda bostäder, vid periodens slut | 306 | – | 306 | – |
1) Includes 167 (–) homes that have been converted from rentals
2) Includes 167 (85) homes that have been converted from rentals
3) Of which 80 (365), respectively 16 (28) percent, are under contract to be sold upon completion
Time of completion of our own ongoing housing development projects
1) Refers to Swedish tenant-owner associations and single homes, Norwegian condominiums and share housing and Finnish residential limited companies
Rental apartments Bara Centrum
Svedala
Property Development
Net sales and operating profit from operations are derived from acquisitions, development, running and managing wholly owned property, shares in the result from joint venture companies as well as capital gains/losses from the divestiture of completed property and shares in joint venture companies.
October – December 2024
Net sales for the fourth quarter 2024 were SEK 636 million (453) and operating profit was SEK 533 million (63). Capital gains from property divestitures amounted to SEK 169 million (88). The quarter included among athoers the divestiture of a logistics property in Södertälje. Profit contributions from joint venture companies amounted to SEK 385 million compared to SEK 7 million in the corresponding quarter last year, of which profit contributions from Fastighets AB Centur amounted to SEK 375 million.
During the fourth quarter Peab acquired four investment properties in Varvsstaden, Malmö for SEK 784 million with a net operating income of SEK 43 million and development properties with about 280,000 m2 of planned development rights in Malmö for SEK 1,239 million from the joint venture company Fastighets AB Centur. The acquisition also included an ongoing development project, Hall 259 with 11,000 m2 leasable area and 550 parking spaces, which will be completed in 2027. Peab also acquired an investment property in the Kirseberg-Östervärn area in Malmö for SEK 68 million. The zoning process is underway with the intention to develop around 55,000 m2 development rights for homes and offices in the area. All in all the acquisitions amounted to SEK 2,091 million. At the same time Fastighets AB Centur divested investment properties to the other owner, Fastighets AB Balder, for a total of SEK 5,228 million. The transactions had a positive effect on operating profit of SEK 367 million and are included in joint venture profit from Fastighets AB Centur. Peab has developed homes and offices in Varvsstaden for several years and will be operating in the area for a long time to come.
January – December 2024
Net sales were SEK 686 million (534) and operating profit was SEK 823 million (107) in 2024. Capital gains from property divestitures amounted to SEK 440 million (96) in total, of which the divestiture of the shares in Tornet Bostadsproduktion contributed by SEK 220 million. Profit contributions from joint venture companies amounted to SEK 441 million compared to SEK 77 million last year, of which profit contributions from Fastighets AB Centur amounted to SEK 417 million.
In December 2023 Peab signed a contract to divest its 33.3 percent ownership in Tornet Bostadsproduktion to the two other owners, Folksam and Fastighets AB Balder. Peab has been a part owner in Tornet Bostadsproduktion since 2009. The company owns and manages around 2,200 rental apartments and has some 650 rental apartments in production in a number of cities in Sweden. The deal was closed in January 2024, entailing capital gains of SEK 220 million.
The transactions concerning Tornet Bostadsproduktion and Fastighets AB Centur had a major impact on profit in 2024. These are not transactions that reoccur annually but they exhibit our ability to build value over time in Property Development, both on our own balance sheet and together with partners in joint venture companies.
At the end of 2024 the capital employed in Property Development was SEK 6,165 million (5,034). The increase is due to the acquisition of properties from Fastighets AB Centur. A large part of the capital employed consists of shares in joint venture companies and loans to joint venture companies.
The table below presents current property projects per December 31, 2024.
Current property projects
| Type of project | Location | Rentable area in m2 | Degree rented, % | Recognized value, MSEK | Adopted investment, MSEK | Completion time point | Completion level, % | |||
| Typ av projekt | Ort | Uthyrningsbar yta, m2 | Uthyrningsgrad, % | Bokfört värde, Mkr | Beslutad investering, Mkr | Tidpunkt färdigställande | Färdigställande-grad, % | |||
| Ongoing | Pågående | |||||||||
| Retail, office building and parking | Malmö | Handel, kontor och parkering | Malmö | 11,000 | 13 | 79 | 592 | Q3-2027 | Q3-2027 | 13 |
| Completed | Färdigställda | |||||||||
| Office building | Gothenburg | Kontor | Göteborg | 12,900 | 40 | 532 | ||||
| Apartment hotel | Malmö | Lägenhetshotell | Malmö | 4,200 | 100 | 138 | ||||
| Office building | Malmö | Kontor | Malmö | 2,500 | 100 | 145 | ||||
| Office building | Malmö | Kontor | Malmö | 3,600 | 100 | 135 | ||||
| Office building | Malmö | Kontor | Malmö | 4,900 | 100 | 267 |
Significant joint ventures
Peab’s significant joint venture companies Fastighets AB Centur, Fastighets AB ML4, Point Hyllie Holding AB and Skiab Invest AB are developing well and via them Peab has built up considerable indirect holdings in investment property and development property for both commercial and residential purposes. Regular returns are in the form of shares in the profit from joint ventures recognized in operating profit and interest income on lending. Changes in market values that affect booked values in the joint venture companies are not included in Peab’s accounts.
Fastighets AB Centur
Own, manage and develop commercial property and housing. In November 2024 Peab and Fastighets AB Balder acquired most of the existing property portfolio from Centur. Only a few properties remain in Fastighets AB Centur. After the transactions Fastighets AB Centur is no longer classified as a significant joint venture in Peab. For more information, see Property Development above and the section Other information, Significant events during the period.
Fastighets AB ML4
Own and manage the research facility Max IV. The facility is rented to Lund University.
Peab’s share: 50 percent
Partner: Wihlborgs
Geography: Lund
Recognized value on properties December 31, 2024: SEK 1,840 million (1,890)
Major ongoing projects: No major ongoing projects
Point Hyllie Holding AB
Develop, own and manage the office property The Point as well as own and manage the hotel property Värdshuset 5 (Operator Quality Hotel View).
Peab’s share: 50 percent
Partner: Volito
Geography: Hyllie, Malmö
Recognized value on properties December 31, 2024: SEK 1,344 million (1,379)
Major ongoing projects: No major ongoing projects
Skiab Invest AB
Develop, own and manage commercial property and housing in the Scandinavian mountains.
Peab’s share: 50 percent
Partner: SkiStar
Geography: Scandinavian mountains
Recognized value on properties December 31, 2024 1): SEK 2,157 million (2,149)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 59 million (40)
Major ongoing projects: No major ongoing projects
1) Valued at market price in joint venture companies. The point in time when market valuations take place can differ between the companies. Market prices on properties that affect the recognized values in the joint venture companies are not included in Peab’s accounts.